3. There’s little question that digital is the new language of business. In a
recent survey, 80 percent of senior executives reflected that an investment
in digital transformation within their organization is very important to
future success. However, only a third plan to hire a chief digital officer within
the next two years.1
Instead, CEOs are looking for a strong digital leader to
emerge within the business, with the skills and perspective to drive a holistic
digital strategy and roadmap for future success.
In its 2016 CIO Leadership Playbook, Gartner shares that CEOs are most
likely to look to the CIO to fill the gap in digital leadership.2
In many ways,
the CIO is in the best position to drive an organization-wide strategy that
brings people, data, and processes together to create new business models
and deliver competitive advantage. This ability to connect the dots to
see the big picture is more important than any other success measure for
digital leadership, according to Forrester.3
Tellingly, Forbes Magazine says
organizations in which CIOs were part of overall development strategy
outpace their competition 2:1.4
As CIO, your
own journey
to digital mastery begins
with shaping a powerful
digital vision for the
business — a vision
that reimagines how the
organization creates
assets that deliver goods,
services, and experiences
that customers perceive
as valuable.”
Nigel Fenwick et al. Craft Your Digital Vision.
Forrester. February 9, 2016.
3
5. At Microsoft, we see that the most effective digital CIOs
share these leadership traits:
INNOVATION
MINDSET
INFLUENCE VERSUS
CONTROL LEADERSHIP
STYLE
STRONG PARTNERSHIP
BETWEEN IT AND
THE BUSINESS
5
6. INNOVATION MINDSET
In a recent survey of senior executives, the Economist Intelligence Unit (EIU)
found that only 7 percent say the CIO plays a leadership role in identifying
opportunities to innovate. When asked to identify the primary role of IT, 14
percent said leading technology innovation, versus 86 percent who cited more
traditional IT functions such as maintaining and integrating legacy systems and
operating as a service provider to the business.5
To lead the digital shift, the CIO
will need to look beyond these traditional practices and transform IT from within.
When asked to identify the CIO’s biggest challenge in transforming the
organization to a digital business, Gartner Research Vice President Donna
Fitzgerald wrote, “the digital transition for IT requires giving up a service
mentality and instead adopting an investment mindset. Supporting the legacy
systems of the past can’t be allowed to consume all of the money necessary
to thrive in the future."6
For example, CIOs are investing in modernizing IT
end-to-end. Historically, IT has taken an incremental approach to modernizing
systems as new technology and processes arise. However, according to
McKinsey, organizations that instead take a holistic, end-to-end approach
to IT modernization will be more effective at creating and supporting viable
digital businesses. An end-to-end approach can help reduce the amount
of time required to translate business ideas into new products and services,
helping the business reduce time to market by up to 60 percent.7
To get the
money you need for
tomorrow, you have
to make
changes
in how IT
operates today”
Gartner, Smarter with Gartner, "Analyst Answers:
The CIO’s Biggest Digital Transformation
Challenges." September 23, 2016.
6
7. INFLUENCE VS. CONTROL LEADERSHIP STYLE
Many IT departments have been reluctant to embrace new ways of working,
even stifling innovation and collaboration in favor of maintaining cross-
company standards and cost efficiency. This approach may have once been
the norm, but fostering innovation and disruption is now essential for CIO
success, according to Deloitte’s 2016-2017 Global CIO Survey. Interestingly,
when assessing their own leadership competencies, only 47 percent of CIOs
surveyed consider “influencing internal stakeholders”—an essential skill
for leading change—as a strength; however, 64 percent consider it an ideal
characteristic.8
For the CIO, the key to being an influential leader is to empower users and
instill trust and freedom in the workplace. It’s about creating an environment
where the business feels like it can come to IT with creative ideas. For
example, progressive CIOs are realizing they must influence digital business
and “shadow IT,” not control it—while helping drive innovation around IT
best practices.9
Gartner analysts Kurt Potter and Stewart Buchanan write,
“While traditional, governance and control strategies would be prudent for
centralized IT and major segments of decentralized IT, with digital business
and shadow IT, influencing it will more likely product the most positive
outcomes with business units.“10
IT functions
that recognize
the value of bringing
shadow IT under the
IT umbrella are viewed
by the business as being
less intimidating and
much more
business
intimate.”
Stephanie Overby. “How to Embrace the
Benefits of Shadow IT.” CIO.com. June 6, 2016.
7
8. In organizations
where IT is considered
a partner in the
business, it is viewed
as 3x more effective at
implementing
bottom-up
innovation
and creating
a healthy IT culture.”
STRONG PARTNERSHIP BETWEEN IT AND
THE BUSINESS
The trend toward companies distributing IT budget for innovation across
the lines of business is continuing. According to Deloitte’s 2016-2017 Global
CIO Survey, CIOs surveyed reported a decrease of 11 percent IT budget
allocation to support business innovation between last year and this year,
highlighting the need for CIOs to closely partner with the business to help
drive innovation.11
As funds continue to move towards the business, CIOs need to focus
developing capabilities to deliver business value. Data and analytics is just one
example where IT is taking the lead to help the business improve decision-
making and deliver new services.12
Harnessing the Internet of Things is also
helping IT lead the shift from products to outcome-based services. For
example, by connecting a production line to the cloud for advanced analytics,
a leading manufacturer was able to meet customer demands for faster delivery
of products while decreasing time wasted in the manufacturing process.
Darrin Morrissey. "How CIOs Shape a Digital
Transformation Strategy." Cioinsight.com.
August 22, 2016.
I T
8
10. At Microsoft, we have developed a rich digital maturity model that will help digital CIOs successfully lead the
business to create a strategy and roadmap for digital transformation. The model helps you engage in digital-era
conversations with the CEO and other business leaders, with the goal of creating new digital value and clarity on the
steps needed to bring digital aspirations to life.
The model is organized around four common themes that reflect top areas of investment today. These areas align to
nearly 100 line-of-business capabilities and related technology enablers. The technology enablers are further defined
through the lens of four maturity stages, ranging from lagging to industry best practice. Using this rich model, a
Microsoft advisor will help you lead the business on a digital maturity assessment, uncovering business capability and
technology enabler gaps, and developing a strategy and roadmap to accelerate the digital journey. On the next page,
you can see examples of how digital CIOs are using the model to help the business transform.
DIGITAL MATURITY ASSESSMENT
BUSINESS
CAPABILITIES
TECHNOLOGY
ENABLERS
YOUR DIGITAL BUSINESS ASPIRATIONS AND PRIORITIES
THEMES ENGAGE YOUR
CUSTOMERS
EMPOWER YOUR
EMPLOYEES
OPTIMIZE YOUR
OPERATIONS
TRANSFORM
YOUR PRODUCTS
10
11. EXAMPLE | ENGAGE YOUR CUSTOMERS
The CIO of a major retailer meets with the chief marketing officer, who wants to deliver a cutting-edge in-store shopping
experience complemented by a compelling and consistent omni-channel experience. Upon completing the digital
maturity assessment, “in-store engagement” is identified as a digital lever that will deliver the most value. By bridging
the gap in this area with RFID tags, the organization increased revenue and gained a competitive advantage.
ENGAGE YOUR
CUSTOMERS
CAPABILITIES
• Customer data/analytics
• Digital advertising/CLM
• Tech-enabled stores
• Customer service
automation
• Mobile commerce
ENABLERS
• In-store
engagement
• In-store analytics
LAGGING ADAPTING MATURING BEST PRACTICE
Limited to no use of
technology to inform
in-store processes and
experience design
Some use of technology aids
(e.g. RFID tags) to inform
in-store processes such as
inventory management
Extensive use of technology aids
(e.g. RFID tags, motion sensors)
to inform in-store processes as
well as provide feedback into
experience design
Data from technology aids
across all store locations
provides insight into in-store
processes and optimizing
customer experience
CURRENT STATE
TARGET STATE
11
12. EXAMPLE | OPTIMIZE YOUR OPERATIONS
The CIO of a city government meets with the transportation secretary, who wants to reduce traffic accidents during snow
storms. After completing the assessment, they identify “predictive maintenance” as a critical digital lever for optimizing the
snow removal fleet. By bridging the gap in this area with a GPS and a cloud based monitoring system for the entire fleet,
the city is able to redirect resources to where they are needed most, increasing citizen safety and reducing traffic accidents.
CAPABILITIES
• Data-driven supply
chain and logistics
• Digital asset
management
• Intelligent process
and quality control
ENABLERS
• Yield optimization
• Predictive
maintenance
• Remote monitoring
LAGGING ADAPTING MATURING BEST PRACTICE
No use of predictive
maintenance
Predictive maintenance
available for <50% of
government and contract
fleet
Predictive maintenance
implemented for all government
and contract fleet
Predictive maintenance
implemented for all
government and contract
fleet. Predictive analytics
used to optimize schedules
CURRENT STATE
TARGET STATE
OPTIMIZE YOUR
OPERATIONS
12
13. PARTNERING FOR SUCCESS
Microsoft and our extensive ecosystem of partners are here to help you lead your digital transformation journey. We
have worked with IT leaders at some of the world’s largest organizations and would welcome the opportunity to share
our digital maturity model with you and your leadership team.
Lowe’s partners with Microsoft to
redefine home renovation
Lowe’s wanted to help customers
imagine how kitchen projects would
look in real life before embarking on
a remodel. Lowe’s partnered with
Microsoft to create an augmented
reality experience, enabling customers
to experience a holographic
representation of the kitchen, adjust
options instantly, and share designs
online. The solution brings customers
a new way to experience full-scale
design and appliance options while
maximizing store floor space.
The Sao Paulo State Court of Justice
and Microsoft construct a modern,
sustainable court
The State Court of Justice in Sao
Paulo (TJSP) needed help designing
a long-term plan helping the court
operate more efficiently, better serve
the State of Sao Paulo’s citizens, and
comply with federal law. By partnering
with Microsoft to develop the long
term digital government strategy and
plan, judge productivity increased by
50 percent and the quality of citizen
services were improved with 70 percent
faster response times.
ExpressJet and Microsoft improve
safety and boost pilot morale
ExpressJet wanted to provide pilots
with real-time weather data and make
daily tasks more efficient. Together
with Microsoft, ExpressJet equipped
pilots with an electronic flight bag
loaded with weather, mapping, and
flight information, helping pilots
make more informed decisions while
eliminating the burden of a flight bag.
Pilots can also stay current on news
and keep in touch with coworkers and
family while on the road.
13
15. Attributions
1
The Rise of Digital Leadership. IIC Partners. September 7, 2016.
2
2016 CIO Leadership Playbook. Gartner.
3
Organizing Your Digital Future. Forrester, December 2, 2015
4
Ben Kerschberg. “How CIOs Can Use Crowdsourcing to Drive Digital Business.” Forbes. September 19, 2016.
5
“Why CIOs must look beyond departmental walls to inspire innovation.” The Economist. 2016
6
Gartner, Smarter with Gartner, “Analyst Answers: The CIO’s Biggest Digital Transformation Challenges.” September 23, 2016.
7
Driek Desmet, Markus Löffler, and Allen Weinberg. “Modernizing IT for a digital era.” McKinsey. September 1, 2016
8
Khalid Kark, Mark White, Bill Briggs, Anjali Shaikh. Navigating Legacy: Charting the Course to Business Value (2016-2017 Global
CIO Survey). Deloitte University Press. November 10, 2016.
9
Sarah K. White. “Empower your employees by embracing shadow IT.” CIO.com. September 13, 2016.
10
Gartner, Coming to Terms with Business Unit IT to Prepare for Digital Business. Kurt Potter, Stewart Buchanan. April 21, 2016.
11
2016 State of the CIO Survey. CIO.com. December 21, 2015.
12
Hugo Moreno. “5 Keys To CIOs' Digital Transformation Success.” Forbes. September 15, 2016.
15
